Should Your Business Use A Wholesaler Or A Distributor?
April 19, 2018
If your small business manufactures goods then you probably think about distributors and wholesalers at least once a day. With both parties playing such a big role in helping small businesses succeed, it’s difficult to make up your mind about which one you to use.
What’s The Difference?
In order to know which one to choose, it’s best to know the difference between the two.
Wholesalers buy your goods at a discount and resell them at a higher price. In certain industries, these prices may not be regulated, allowing your wholesalers to make up to 100% or more in profits on your goods. Wholesalers may also fulfill orders from a retailer but bear no responsibility towards marketing your products.
Distributors actively promote the manufacturer’s products and will find other markets to help grow the business.
Distributors, on the other hand, have a direct stake in your product and so will likely shoulder some responsibility towards making your product a success. Distributors actively promote the manufacturer’s products and will find other markets to help grow the business. This is because they earn their revenue by taking a percentage of the profit from your product’s sales.
So Which Should You Pick?
Both options have advantages. Wholesalers, for instance, are responsible for storing the goods they buy from you, allowing you to potentially save on storage costs. Distributors assist with the difficult job of marketing your products and are partly responsible for creating relationships with the consumer.
A distributor could act as the middle-man between your business and a potential wholesaler, as well as between your business and the retailer
However, distributors do have an edge over the wholesaler. A distributor could act as the middle-man between your business and a potential wholesaler, as well as between your business and the retailer. So if you really had to choose, finding a reliable distributor should at least be the first course of action to take.
That isn’t to say that hiring a reliable distributor means you can rest easy.
Regardless of how professional they are, unforeseen circumstances could create problems between you and your distributor. Because of this, it is always a good idea to find a dependable wholesaler to fill in any gaps in the product distribution line.
In an increasingly globalized world, finding a reliable distributor and wholesaler is no longer limited to your area code. For the best possible sales results, you should consider hiring distributors and wholesalers based on global recommendations.
For more information, you can read this small business guide to finding a wholesaler.
Once you’re confident you’ve made the right choice, it’s time to figure out payment methods. Wiring funds through banks often prevents business owners from choosing the best wholesalers and distributors because of the fees associated with sending payments abroad.
With Veem, you pay little to nothing when exchanging payments with other businesses. Our advanced money transfer system is fully operational in 80 countries which means you don’t have to limit your choices to your business’ location.
Sign up for an account at Veem today and find out how easy it is to exchange and track payments with your wholesalers and distributors.